Indias Money Market is a financial market where short-term financial resources having liquidity of one (01) year or less are exchanged on stock trades.
Question : यह भारत के मुद्रा बाजार का हिस्सा नहीं है ?
- 1 . बिल बाजार
- 2. मनी मार्केट
- 3. भारतीय स्वर्ण परिषद
- 4. बैंक
Question : This is NOT a part of India’s money market ?
- 1 . Bill market
- 2. Call money market
- 3. Indian Gold council
- 4. Banks
The protections or exchanging bills are exceptionally liquid. Likewise, these facilitate the member’s short-term borrowing needs through exchanging bills. The members in this financial market are generally banks, enormous institutional financial backers, and individual financial backers.
Here, we’ve given some details of India’s money market and its related details.
Importance of money markets in India
The money market is an important part of the economy of every country because the money market helps to boost the economic rate as well as the financial market. The money market really plays an important role in the economy of every country. The money market also allows ample participants to raise funds.
The government of India has already included the money market term to boost the economy some years before. Using the money market terms, India’s government allows a variety of investors and borrowers.
Objectives of India’s Money Market
The main objectives of India’s money market are here.
Allowing big borrowers like every individual borrower, any government borrower, etc. with short term financial funds at attractive prices.
It provides excellent offers to lenders that enable them to turn their idle funds into effective investments.
It helps in regulating the percentage of liquidity in the economy of a country.
Fulfill the working capital requirements of lenders. For example, the money market helps those small businesses or organizations that need necessary funds to meet their working capital requirements.
Apart from that, the money market is an important way of getting finance for the government field both national and international trade.
Different Parts of Money Market Instruments in India
There are several money market instruments in India, including Treasury Bills, Commercial Bills, Commercial Paper, Certificate of Deposit, and Call Money.
1) Treasury Bills
Treasury Bills are one of the biggest money market instruments in India. They help in varying short-term maturities. Every year, the Indian government issues T-bills at a discount for 14 days to 364 days. This type of money market instrument is issued at a discount and repaid at par at the time of maturity. T-bills can be purchased by a company, firm, or person at a discount and repaid at par at the time of maturity.
2) Commercial Bills
Commercial bills are another notable money market instrument in India. Generally, commercial bills work more like exchange bills. This type of commercial bill can be considered better liquidity. At present, many businesses issue commercial bills to meet their short term money requirements. In case of the immediate cash requirements, any company or firm, or person can be transferred from one person to another.
3) Commercial Paper (CP’s)
Commercial papers can be issued by the corporate to meet their short-term working capital requirements. Generally, the commercial paper (CP’s) period ranges from 15 days to 1 year. After getting CP’s approval from RBI, a company or firm can issue the commercial paper in the market.
4) Certificate of Deposit (CD’s)
Certificate of deposit is another best instrument of the money market in India. An individual or corporate, trust can get CD’s at a discount from scheduled commercial banks. The commercial banks can be issued the CD’s for the duration of these varies between 3 months to 1 year.
5) Call Money
Call money is a type of money market through which firms or companies can manage day-to-day cash flows. Call money is a segment of the current market where scheduled commercial banks borrow or lend on short notice the period of fourteen days. However, the interest rates are different from other money market instruments.
Features of India’s Money Market
Money market instruments are also called a collection of markets.
The money market enables firms, companies, and financial service providers to collect funds in their immediate requirements.
The money market trade volume is really high.
The money market information will find you accurate and general information purpose. If you want to know more money market information, please search online.